Emerging market debt

[macdon02]

Rumors are that Argentina is gonna ramp up export taxes on grains, India just increased import taxes on wheat from 10-40%. As the USD keeps increasing, looking for short term smash, with breakout on 5th attempt, its looking like the govts of the world are gonna use grains to fund their interest charges. Argy looking at a 30% rate on beans. I believe we are seeing the end of exporting grains. If you don't believe me, look at your quotes on domestically used grain and that for export. The ROW simply doesn't have the USD to import grain. The gluttony of govt indulging in debt is gonna hit like a sledge hammer. It's only North America that has private importers, most foreign buyers are arms of govt that purchases grains and meats. Egypt's GASC has been having issues getting letters of credit, this will spread as credit simply dries up. EU and Japan central banks have turned into the only buyer of their debt. Short term US debt has no sellers. There's a lack of liquidity unfolding. As far as being locked out of all our regular customers, China, India, Saudi, they simply can't afford to buy, it isn't anything we've done, they are trying to keep the balls in the air, making interest payments. As DX goes up the pressure will increase and eventually someone will drop them all. US switching from oil importer to exporter is creating a shortage of $'s in the world as they stay at home. Powell has indicated he'll drop rates, likely a quarter, no more then half but as pensions keep hitting the headlines, the pressure to increase them will give make him give in and resume the increases, applying more and more pressure externally as the demand for Dollars increases. It's gonna be an interesting 5 years ahead, don't expect the easy lending of the last 11 years to continue and prepare to operate on cash. The investors that have sunk money into ag trying to get a return will vanish as they can get better returns elsewhere, causing a decline in land values, what's the going rate on rent? 5% of purchase value? When that starts showing up at the bank, they are gone. I expect that's what the super farms are paying. It's gonna be interesting to say the least.

[tubs]

Interesting thoughts macdon and I think you are probably right I would hate too see all the carnage outhere then we can not lose a generation of young farmers again then the hutterites will have it all.

[helmsdale]

Had an older gentleman tell me his land was now valued at $1500/ac and therefore he was entitled to $75/ac cash rent cause he could get that return elsewhere...

Bit my tongue... but honestly, sell it and invest it elsewhere then!

[ajl]

The ROW simply doesn't have the USD to import grain.

Bingo. That is the end game. Fat lady is now singing. It is over.

[farmaholic]

Sòme how I think things will continue to plod along, but maybe not at what we've become accustomed to. Is it likely better to be unable to sell grain than to sell it at a loss?....but I didnt know not eating was an option. And there is the problem for us....people still need to eat but maybe can't afford to pay us what it costs to produce it.

Reset time? Some days I wish it would happen and we just get it all over with.

[biglentil]

5% return? Reality is 3% if your very lucky in my neck of the woods. But thats not what drew the speculators to buying land its the never ending year after year appreciation. Until it doesn't then you'll see the investors scatter like cockroaches.

When you live in a world of funny money and artificially low interest rates you're bound to have these boom and bust cycles. Problem is total money supply is up 400 percent since 2008 and to keep the charade from imploding its going to take a whole lot more funny money printing. Whats that smell? To me smells like 70's style stagflation. Except this time around the next Vlocker won't have the ability to raise rates to 20%. Central bank around the world are buying gold at the fastest rates since the 60's. Idiots don't they know gold is barbarous relic, they should be stock piling the digital illusion of wealth Bitcoin.